Friday, June 12, 2009

Take the cash or keep the clunker? It's a toss-up

Mission auto dealer Tim Doherty insists its just a coincidence he switched to selling fuel-sipping Nissans from gas-guzzling Chryslers just as Congress appeared to be putting final touches on a cash for clunkers plan to encourage buying higher mileage cars.

"We could see a year ago that Chrysler wasn't going to be a viable stand-alone franchise for much longer," said Doherty, who a few weeks ago became one of 789 Chrysler dealers axed by the company in its bankruptcy proceeding. So, when an opportunity to buy the O'Neill Nissan franchise in nearby Overland Park arose, Doherty moved. And, with the formal opening of his new Keystone Nissan franchise Friday, the business continues what has been a series of dealerships 50 years in the same downtown Mission location.

And cash for clunkers? Auto dealers are optimistic. Similar plans have been boosting sales in Europe. Skeptics are less sure. Basically, here's the deal as it stood Friday.

You would trade in a clunker, EPA rated at less than 18 miles per gallon and get $3,500 to $4,500 to buy something that gets a minimum 2-4 more miles per gallon. How much you get depends on what you buy and how much the rated mileage improves.

Critics see a lot of problems. Michigan automotive marketing consultant Mike Karagozian forecasts less than spectacular results and a bad deal for taxpayers. Automotive special equipment makers worry that their jobs and businesses are threatened.

Other observers just don't see how the math works out for motorists who, by AAA's calculations, are spending about $9,400 a year to own an operate their cars. Time's Brad Tuttle is just one commentator who figures that even $4,500 is a crummy trade-in price for some gas guzzlers.

Here are two links to help you crunch some of your own numbers. One is is to the Kelley Blue Book, and a list of the sometimes surprising cars most likely to qualify for the payments. The other is to an AAA worksheet to help you compare potential before and after operating costs.

Happy motoring.

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